Welcome to the Bend the Curve blog series on Techstars.com! We are excited to share with you the newest book for entrepreneurs, Bend the Curve, authored by Andrew Razeghi. (More about Andrew below.) In this handbook for entrepreneurs, Andrew has tirelessly captured the brilliance and insights of over a dozen of our most sought-after mentors. Everyone from first-time entrepreneurs to seasoned veterans will find useful, practical advice from other founders that you can use on your journey.
Over the next couple of weeks, we will continue to release short excerpts from the book including stories of entrepreneur success and failure. Today, read about Creating and Hiring for Culture and the story of Giveforward. Check it out and come back next week for the next post!
Bend the Curve
Chapter Three excerpt: Creating and Hiring for Culture
In this chapter, we’ll talk about:
- Where company cultures comes from.
- How to create a culture of innovation.
- How to hire for the culture you want to create.
- How to sustain that culture as you grow.
In the early days, when you are cash-strapped and unable to pay competitive salaries, you really have only two tools to attract the best talent: equity and culture. People join start- ups for different reasons, but among them is a very personal feeling that they “fit in.” They believe in the mission that the company is on, the product the company sells, and perhaps most importantly the culture that the company has created. As a founder, you are not only competing with the competitors in your category, you are competing for talent. Don’t wait to work on culture. It’s never too early to start thinking about it and, more importantly, to start living it.
Several years ago, when I first met Desiree Vargas-Wrigley and Ethan Austin, co-founders of the crowdfunding platform Giveforward (a Techstars company), I was taken aback by their commitment to culture. They had come to my office to pitch me as investor in their seed round. I loved the problem they were out to solve and I loved their business model, but what struck me most was a comment Ethan made after their pitch.
He said they were really serious about their culture and went on to explain their values. As much as he was engaged during the pitch, he physically lit up when he spoke about culture and leadership. This typically would come as no surprise. Culture is a big deal. Many companies talk about culture. Founders believe in it. People know it is important. But what struck me about Ethan’s enthusiasm for culture was the simple fact that, at that time and in that moment, Giveforward had one employee. One. And she had just recently become a salaried employee after working for 18 months as an unpaid intern. Ethan spoke about culture not as if they had one employee but as if they had one thousand employees. I invested.
Today, Giveforward is the leading crowdfunding site for medical expenses. They employ 29 people and have a Net Promoter Score (NPS) that rivals Amazon, Apple, Harley- Davidson, and Zappos. NPS, a measure of customer loyalty, is a direct reflection of a company’s culture. Essentially, a company’s NPS is the difference between those customers who enthusiastically recommend the company (promoters) and those unhappy customers who enthusiastically detest the company (detractors). The average company has a Net Promoter Score in the 5 to 10 percent range (meaning they’re barely breaking even, on a net basis, between the customers that love them and those that hate them). Many firms (and entire industries for that matter) have negative Net Promoter Scores (you know who they are).
In contrast, Giveforward’s Net Promoter Score is 80! Eighty! Based on analysis by Bain, companies that achieve long-term profitable growth have Net Promoter Scores two times higher than the average company and grow at twice the rate of their competitors. All those who poke fun at culture as a flavor-of-the-month initiative, do so at your own peril. Culture matters, a lot.
I liked that. Give me more. To order the book: http://bendthecurve.co/
About the Author
Andrew Razeghi is an educator, author, speaker, consultant and angel investor. He is a limited partner in Techstars and integrally involved in the Chicago program. Andrew is a lecturer at the Kellogg School of Management at Northwestern University and is also founder & managing director of StrategyLab, Inc., a growth strategy & innovation consulting group.
Andrew is a contributor on the topic of innovation for a series of shows on The Travel Channel and is the author of several books including The Future of Innovation, The Upside of Down: Innovation through Recessions, and The Riddle: Where Ideas Come From and How to Have Better Ones. The Riddle was chosen by Fast Company as one of its “Smart Books.” You can reach Andrew by email at firstname.lastname@example.org or follow him on twitter @andrewrazeghi.